Judge: Douglas W. Stern, Case: 23STCV16328, Date: 2023-11-01 Tentative Ruling

Case Number: 23STCV16328    Hearing Date: November 1, 2023    Dept: 68

Motion to Compel Arbitration

Jose Antonio Arroyo vs. Lee Kum Kee USA, Inc., 23STCV16328

Moving Party: Defendant Lee Kum Kee USA, Inc.

Background

            Defendant Lee Kum Kee USA, Inc. (Defendant) filed this motion to compel arbitration based on an arbitration agreement that Plaintiff Jose Antonio Arroyo (Plaintiff) signed when he began working for Defendant. The motion is filed pursuant to CCP § 1281.2. Defendant seeks to compel arbitration of Plaintiff’s individual PAGA claims.

            Plaintiff does not dispute that the agreement exists or that the arbitration agreement is enforceable. Instead, Plaintiff opposes Defendant’s motion on the basis that the arbitration agreement does not apply to “private attorney general representative action” and those claims cannot be arbitrated and should proceed in court. (Magnanimo Decl., Ex. A., ¶ 7.) Plaintiff also opposes the motion on the basis that arbitration would be barred by the FAA and the Cal. Labor Code.

            Defendant argues in its reply that the arbitration agreement only states that representation PAGA claims are excluded from arbitration and does not include individual PAGA claims in the list of claims excluded from arbitration. Defendant also argues that the sections of the FAA and the Cal. Labor Code that Plaintiff cites would not bar arbitration in this case.

Analysis

            Paragraph 7 of the parties’ arbitration agreement reads as follows:

“Private attorney general representative actions under the California Labor Code are not arbitrable, not within the scope of this Agreement and may be maintained in a court of law.”

(Magnanimo Decl., Ex. A., ¶ 7.) Plaintiff uses this paragraph to support his argument that the parties’ agreement does not allow for the arbitration of individual PAGA claims. Defendant argues in its reply that this paragraph only applies to representative PAGA claims, and not to Plaintiff’s individual PAGA claims.

            Plaintiff cites Duran v. EmployBridge Holding Company (2023) 92 Cal.App.5th 59 in support of his opposition to the arbitration of the individual PAGA claims. However, as Defendant points out in its reply, that case is distinguishable from the present case because the arbitration agreement in Duran expressly excluded all PAGA claims from arbitration. The arbitration agreement in the present case only excludes representative PAGA claims from arbitration.

            Plaintiff also makes an argument about how the individual PAGA claims cannot be compelled to arbitration because there is no severability clause in the agreement. This does not appear to be relevant because the agreement only states that representative PAGA claims are excluded from arbitration. Even if it were relevant, a severability clause is not required because Civ. Code §§ 1599 and 1670.5(a) allow for unlawful or unconscionable clauses to be excluded from contracts.

            In Plaintiff’s opposition, Plaintiff also argues that the FAA exemption for transportation workers would apply to him. However, Defendant argues in its reply that Plaintiff did not work in the transportation industry because Defendant is not in the transportation industry. Defendant is a food manufacturing company that produces and distributes Chinese sauces and foods. (Reply at p. 7.) Plaintiff’s job was to offload shipping containers. (Reply at p. 8.) Section 1 of the FAA exempts “contracts of employment of seaman, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” (9 U.S.C. § 1.) It does not appear that Plaintiff’s job would fall into these categories.

            Plaintiff also argues that Labor Code § 432.6 would invalidate the arbitration agreement; however, that section states that “Nothing in this section is intended to invalidate a written arbitration agreement that is otherwise enforceable under the Federal Arbitration Act.” (Labor Code § 432.6(f).) The parties’ agreement is otherwise enforceable under the FAA.

            Based on the foregoing, the Court grants Defendant’s motion to compel arbitration of Plaintiff’s individual PAGA claims.

Order

            Defendant’s motion to compel arbitration of Plaintiff’s individual PAGA claims is GRANTED.